BREXIT, what now ?

When more than 17 million Britons voted to split from the European Union in late June – enough to see the Leave camp victorious but no less shell shocked than the 16m remainers – you could almost hear the collective gasp in the UK, Europe and beyond.

In the weeks since that extraordinary and spectacularly ill-advised referendum, the angst, hand wringing and regret has been intense, on both sides of the political and EU divide.

What the long term ramifications may be for the economy, business and trade will take months, possibly years, to play out. But what is abundantly clear is that further uncertainty in an already turbulent world is hardly helpful for the travel industry.

Flight Centre already signalled in a recent profit warning that the referendum was among the factors to dampen business and consumer confidence. And managing director Graham Turner told travelBulletin the uncertainty was not about to vanish.

“It’s going to be a bit tougher until that uncertainty goes away and that is not going to happen overnight,” he said. “The issue from a business point of view is that with the pound weakening our UK profits won’t translate well into Australian dollars. That’s a negative for us but you have to take the ups and the downs.

“It also might make it a bit more difficult to run a multinational business out of the UK which is where our European headquarters is. That said, I don’t think it will be too bad.”

Turner rejected any notion that Flight Centre would relocate its head office away from UK. “No, never, he said, “not in the next 20 years anyway.”

More positively, Turner doubted the Brexit vote would have any material impact on Australians’ travel plans, noting that most consumers base decisions on airfares, “and they aren’t going to change much”.

“I don’t think [Brexit] will have much impact in terms of buyer resistance,” he said. “Because of the weaker pound it’s a good incentive to package as much as you can in Australian dollars and I think most people realise that. Hopefully most travel agents know that too.”

Dennis Bunnik, chairman of the Council of Australian Tour Operators, agreed that the weak pound could provide short term benefits. “It will help increase visitor numbers or at least make those visiting spend more,” he said. “I also don’t think the cost of doing business will have a significant impact on visitor numbers. Any increase in costs is likely to be minimal when spread over the number of passengers travelling.

“I also believe there may be a stronger move towards the Commonwealth and this could make it easier for Australians to get working holiday visas.”

Such a move would have a “big impact” in the number of Australians heading to the UK, he said.

Bunnik warned, however, that divides in society exposed by the referendum, both in the UK and Europe, had the potential to damage travel to Europe “in the same way

‘Because of the weaker pound it’s a good incentive to packaage as much as you can in Australian dollars and I think most people realise that’

that terrorism is having an impact”.

Tourism Australia said it was too early to predict the impact on arrivals from the UK, although Carolyn Childs, director of Mytravelresearch.com, suggested it could be arrivals from China to Australia that slow as the Chinese take advantage of favourable exchange rates and head to London.

She added the possibility of more arduous visa regulations once Britain leaves the EU could make the UK less attractive. Furthermore, the business environment for budget airlines could affect aviation, a view shared by the International Air Transport Association.

“When you add in more processing and different security environments it starts to look less attractive to low cost carriers,” Childs said.

Certainly, Easyjet warned that walking away from the EU would not be helpful, and in the immediate aftermath of the vote wrote to the Government and European Commission urging them to “prioritise the UK remaining part of the single EU aviation market, given its importance to trade and consumers”.

Flight Centre’s Turner believed the UK and EU will reach a mutually beneficial agreement on air rights.

“We do a reasonable amount of Europe

‘ We do a reasonable amount of Europe out of the UK and the reality is that most of the benefits flow towards Europe so I can’t see the EU tightening up too much’

out of the UK and the reality is that most of the benefits flow towards Europe so I can’t see the EU tightening up too much,” he said. “Most of the low cost carriers go to regions which need the tourist traffic so I don’t think Europe is going to turn away UK airlines.”

As for Visitbritain, the UK tourism agency reiterated its previous statement that it expects a “strong summer holiday season”, on the back of its global #OMGB ‘Home of Amazing Moments’ campaign.

But observers questioned whether the Britain is Great branding that has spearheaded Visitbritain’s marketing for several years has been undermined by the referendum result.

“It’s well-positioned, smart and consistent branding but the claims that underpin that branding, that Britain is global, connected and powerful, could in some sense have been weakened,” said Childs, herself British. “It’s a challenge for the UK. It’s a different place now. It’s smaller and more divided and I am sure Visitbritain is looking at this.”

Nigel Morgan, professor of tourism and events marketing at the UK’S University of Surrey, told brand insight blog, The Place Brand Observer, that such an impact on Visitbritain was real, but would likely be short-lived.

“I think Brexit might have a short-term impact on the UK’S previously strong reputation as an open and multi-culturally diverse country, where people want to work and study,” he said. “However, I don’t think it will affect its robust reputation as an exporter of quality products and as an attractive and heritage-rich tourism destination.

“Overall I’m hopeful and confident that in the medium term, the UK will prove a resilient brand.”

As the UK’S new political leaders begin the delicate task of negotiating Britain’s exit from the EU, one thing is certain among the mountain of unanswered, and unanswerable questions; the eyes of the world, the Australian travel industry included, will be watching.